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Ukraine Crisis: The Covering Cloak of Sanctions

April 5, 2022

Europe is not only sanctioning Russia but mainly itself. The winners are big tech and financial corporations. With the sanctions, however, Europe is also covering up its own failure to take vigorous action against sinful events in Ukraine.

Just over a week ago, the European Commission adopted a Temporary Crisis Framework. This allows member states to use the leeway, provided for in-state aid rules, to support their economy in the wake of the Ukraine crisis. In this context, Margrethe Vestager, the Commission's Executive Vice-President in charge of competition policy, said that the sanctions imposed by the EU and its international partners had a major impact on the Russian economy, but also put a strain on the EU economy. Therefore, the economic impact had to be mitigated and severely affected companies and sectors must be supported, she said.

Ulrike Reisner, the Austrian political scientist, continues her analysis of the current military conflict and its consequences for the European economy.

Original publication on
Campaign of the Big Tech Corporations
In economic terms, the European states are waging a war against themselves. Although this “war” did not start with the Ukraine crisis and the sanctions imposed, it has clearly intensified. While politics and the media are beating the propaganda drum a little louder every day, it is worth taking a step back and having a deeper look at those actors who are definitely profiting from this situation.
If we start with the question of who was the first to start a massive fuelling of Russophobia in the West, then these are actors who cannot necessarily be attributed to states alone. However, to the extent that they can be attributed to states, they are those with intensive economic ties to actors in Ukraine, such as the US.
Starting with the beginning of the Ukraine crisis, it was above all the US big tech companies that placed a filter of information over the European countries. This filter makes it difficult for the states to get an up-to-date picture of the situation in Ukraine and to inform their own people accordingly.
As not even at the height of the Cold War, attempts are currently being made to censor the internet and social media. With the method of political correctness, information and serious news are suppressed and replaced by political propaganda and dogmas. This concept, with its immediate, devastating effects on societies and the economy, first became visible in European states during the Corona crisis.
Paradoxically, for years the Europeans have accused the Chinese of what they are now allowing in their own countries: systematic suppression and falsification of information, interference in freedom of expression, persecution of dissidents or critical spirits, and even the annihilation of their economic existence. However, states can no longer do this without the active help of corporations like Google, Meta or Microsoft.
The big tech companies obviously want to hide the fact that for more than two years they themselves have been carrying out an unprecedented attack on the democratic structure and the freedom of information and opinion in the Western states. Facing the Ukraine crisis, they are continuing what was started during the Corona crisis: same methodology, different theme.
Sanctions - boomerang against Europe
It is a fact that the West has been imposing sanctions on Russia since the Crimean crisis. The extent of these sanctions was in proportion to what is known from comparable conflicts with the application of economic sanctions, such as against Iran or North Korea, from the perspective of US and European sanctions policy. The well-known mechanism of this economic sanctions policy is to use non-military means to force the sanctioned state to behave in a desired manner without the sanctions having an excessive impact on the economy of the West. The essence of this sanctions policy can be compared to the use of weapons whose effect is to be directed against an opponent and not against the one using the weapon through collateral damage.
In contrast, Europe -under pressure of the US - is now engaging in a sanctions policy against Russia, the damaging effect of which is directed equally against Russia and Europe itself. This applies to the financial and banking sector, but above all to the energy and raw materials sector and even to industry and the service sector.
The main burden of humanitarian aid for Ukraine is also borne by the European states, with all the economic, systemic and social costs that this entails, while the US mainly sets measures that are intended to enforce and strengthen the economic interests of the US and the corporations based there. In addition to energy and arms deliveries, these include - once again - the weakening of European banks (especially those active in Russia) and the control of the European financial system as part of the sanctions policy. The control of information and media is hybrid with the support of the big tech corporations that make money from big data.
States surrender sovereignty to banks and corporations
If the European states are not to be accused of completely irrational behaviour, then there are only two possible explanations for their behaviour with regard to the sanctions against Russia. These two are interrelated:
1. The European states intend to use these sanctions and their effects to conceal economic damage that has its cause less in the Ukraine crisis than in the Corona crisis.
2. As a result of the financial crisis in 2008 and the subsequent euro crisis, the migration crisis of 2015 and the Corona crisis the European states have already lost so much state sovereignty that they can no longer escape the controlling pressure of the international banking and financial sector and must therefore support measures that predominantly serve this sector.
One thing is certain: a sovereign state must be able to steer economic and fiscal policy within the framework of its competences, otherwise monetary and currency policy will be decoupled from the state and the state will be at the mercy of those institutions that have taken over monetary and fiscal policy control in its place. This can be seen for the Eurozone states in the completely detached policy of the ECB, which can hardly be influenced by the states any more. The current conflict between the ECJ and the German Federal Constitutional Court over the ECB's government bond-buying programme shows just how fundamental this is.
A sovereign state´s economic capacity presupposes that the state achieves surpluses from its state action. Over-indebted states that no longer generate any surpluses lose their state sovereignty in the true sense of the word, as shows the example of Greece, which is under the European bailout umbrella. At the beginning of the year, the states of the Eurozone were 13 trillion euros in debt, which corresponds to the level of the economic output of the states concerned. According to a study by the Institute of the German Economy , France, Spain and Italy must expect further increases in debt ratios by 2041 (!).
In view of this current debt situation, financial sanctions against Russia cannot be in the interest of the EU states at all. Financial sanctions, which are nevertheless decided upon, exclusively serve the financial backers of these states. As is well known, these are mainly donors outside the European Union.
States in the stranglehold of corporations
For more than two decades there has been a rising economic interest in promoting genetic engineering, including the development of mRNA and DNA technologies. Not least, in 2012 the Defense Advanced Research Projects Agency (DARPA) decided to enter this field with substantial funding. It is well known that considerable funds have to be raised in this economic and research sector, which would make state involvement necessary. However, if a large number of states are over-indebted and do not have any surpluses, these states will not get involved in this sector. It therefore takes worldwide, severe crises such as the Corona pandemic to create pressure on states to commit enormous state resources in this sector - even if it is on the basis of additional state debt.
In the course of the Corona crisis, the European states, under the leadership of the EU institutions, loosened up financial support to the tune of many billions of euros for the benefit of selected corporate groups, but at the same time kept these companies free from any entrepreneurial risk. For this, the EU states have accepted an enormous new debt, which will prevent these states for many years to come from generating the surpluses they need to maintain full state sovereignty.
It can already be seen that in this financial commitment of the European states, the profits, for example of Pfizer and Moderna (rumoured to be 50 billion euros) are being privatised and the enormous costs are being socialised by the financing states. The banking and financial sector is also earning a lot from this huge business, but in coordination with the states it is trying to hide the enormous economic damage caused to the states with a policy of low interest rates and inflation.
"Driven by massively increased energy prices as a result of the Ukraine war, inflation in the euro area marks a new record high" was the headline of the German Manager Magazine at the beginning of April 2022. For Germany, the Federal Statistical Office had already reported an inflation rate of 7.3% for March. In a European comparison, inflation was particularly high in the Netherlands (11.9%), Estonia (14.8%) and Lithuania (15.6%). Spain is scratching 10%, Greece, Italy and France are also between 6 and 8%.
What could be more obvious than to lay the cause and blame for these developments on Russia's military action in Ukraine and the sanctions policy this necessitated?
Big Data, the gold of the 21st century
The global race to develop AI between the big tech companies is on the run. In the Western hemisphere, the contribution of states in this race is subordinate to that of the big tech corporations. This race also concerns the World Wide Web and social media and thus the lead in information and control sovereignty. It is no secret that in AI development and the battle for Big Data, western big tech corporations are putting pressure on states to relax data protection. As is well known, there are significant differences in the level of data protection between the US and EU-Europe.
The ECJ's data protection rulings are not least a thorn in the side of corporations like Meta, which have even announced that they will have to shut down digital media in Europe if the stricter data protection regulations are not relaxed. For Western-style states with strict data protection laws, emergency and exceptional situations are needed to be able to lift these rules for a limited period of time. Such a situation was brought about by the Corona crisis, which was used by states in Europe as a pretext to introduce all the data collection, surveillance and data linking that had previously been criticised - with reference to China - as a "totalitarian surveillance system".
The Corona pandemic is over, but the European states have not yet withdrawn any of these measures. On the contrary, the EU Commission has once again concluded a data protection agreement with the US that reduces European data protection standards to the level of interest of the big tech companies. It is not surprising that the Ukraine crisis was immediately taken by the West as a welcome occasion to continue, with the help of the big tech companies among others, all those measures that were already used during the Corona crisis - for example propaganda, censorship, inadmissible data linking, technical suppression of the dissemination of information of critical media or opinions. The paradox is that the states are once again surrendering a substantial part of their sovereignty, this time to the big tech companies and their financiers.
The Cloak of Sanctions
Where and how do the developments in European states outlined here intersect with causes of the current Ukraine conflict?
It is becoming increasingly clear that in recent years Ukraine has surrendered essential elements of state sovereignty to the non-state global technostructure in the manner described here. It can at least be understood that developments driven by economic interests have taken place on the soil of Ukraine, which could not easily be reconciled with the previously applicable rules of the EU states (acquis communautaire).
At this point, only one example should be singled out, which seems to be progressive and harmless, but should have been a cause for concern for the European states. With the support of European banks such as Raiffeisenbank, Ukraine has begun to introduce a digital identity for Ukrainian citizens with the ePidtrymka project, linked to a system of "social credits" - exactly what the EU accuses China of as a "totalitarian surveillance measure". The involvement of Western big tech and financial companies should predictably have led to a conflict with the EU as well, which is now “ideally” being replaced by the conflict between Ukraine and Russia.
In principle, it had been apparent to European states for some time that Ukraine was allowing companies to carry out a wide range of activities on its territory that posed a considerable risk and conflict potential both for neighbouring EU states and for the Russian Federation (e.g. bio-research laboratories with high-risk research). The sanctions against Russia are also visibly hiding the fact that the West, contrary to its own standards and rules, has failed to take early action against Ukraine to prevent developments on its territory that are likely to endanger peace and freedom in Europe and Eurasia.
The main means of this concealment is the abuse of information, media and control policies by Western states in connection with the Ukraine conflict. It is probably not inconvenient for the West that traces are being removed by the conflict - and to make the removal of the traces look like a crime. Everything is being done to avoid giving a complete and correct account of the development of this conflict, of the contribution of third parties, but also of the actual cause and course of this conflict. The hitherto valid rules of diplomacy and international law are sacrificed to the all-hiding sanctions and the economic interests of the technostructure.
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